Working with freelancers? Make sure you stick to these 2 rules.

Working with freelancers? Make sure you stick to these 2 rules.  

Two thirds of business leaders in a recent Coople survey said that they use freelancers for their business. Skills, flexibility, and cost were the most cited reasons for this.

What are Freelancers?

“Freelancer” is not a legal categorisation itself. When you hire someone, they will be classified as a worker, an employee, or self-employed.  To work as a freelancer, a person needs to be self-employed.

Using freelancers is a common strategy for bringing skills into your business in a flexible way, especially skills that aren’t needed regularly. Many creatives are self-employed and freelance as visual designers, web developers, or video editors. They pay their own taxes and National Insurance and usually bid for work or give quotes. They will issue an invoice, which you pay instead of paying them a salary. They don’t get supervised while they work, and you actually don’t know whether freelancers complete the work themselves or sub-contract someone else. And (this is important!) you also don’t care, because the only thing that matters is the final product. In cases like these, using freelancers is often the best option. It’s also perfectly legal.

When can hiring a ‘freelancer’ go wrong?

There are also cases where the freelancer model is used in the wrong way. This is often done to save money or increase flexibility, because freelancers don’t have the same rights as workers or employees (e.g. minimum wage,) and the employer doesn’t need to pay National Insurance. It can be short-sighted. If it turns out that you misclassified workers, you might later get hit by hefty penalties and backdated payments. It’s important to consider here that the risk is not limited to the freelancer, the hiring business can also get hit.

Freelancers and compliance: How can you stay compliant without too much effort?

The simple answer is to err on the side of caution. Once you get involved in edge cases, the overhead it requires to stay compliant will probably erase all your cost savings.

If one of these two rules is true, the person you are hiring will almost certainly not be classified as self-employed in any review:

1. They work on-site and are supervised: If someone from your team decides where, when and how the work should be done, the person you hired is almost certainly not self-employed, i.e., can’t work as a freelancer.
2. They cannot sub-contract the work: Unless they are free to send someone else to do the work in their stead, they will not be classified as self-employed.
   

For example, waiters, warehouse workers, or shop assistants will almost certainly not ‘really’ be self-employed.

What else can you do?

If you need flexibility and a cost-efficient workforce, you can hire workers via a flexible work platform like Coople. These workers are employed by Coople in a fully compliant way. Hiring via a tech platform gives you the same level of flexibility you would find with freelancers, and there are many strategies you can use to make your overall staffing structure extremely cost efficient.

As many businesses are worried about cost at the moment, Coople are here to help you optimise your staffing strategy. If you’d like to learn more about how we can support you reach out to us today!